UBS and HSBC are warning that silver may be vulnerable after an extreme rally. The metal rose by roughly 140% in 2025 and briefly traded above $120 an ounce in January 2026. The move was followed by a sharp reversal, with silver reportedly falling almost 30% in a single day, dropping to $67.60 in March, and then recovering toward $87 in May before losing momentum again.

The central concern is demand destruction. Unlike gold, silver does not have the same strategic demand anchor from central bank buying. A large share of silver demand comes from industrial uses, including electronics, solar panels, vehicles and other manufacturing chains. When prices rise too far, buyers may reduce purchases, thrift material use or look for substitutes.

HSBC views silver as fundamentally overvalued and expects the gold-silver ratio to widen, which could allow silver to fall even if gold remains supported. UBS also describes silver exposure as unattractive at current levels. This does not mean a decline is guaranteed, but it highlights the risk profile: after a speculative surge, silver is now highly sensitive to industrial demand, Fed rate expectations and geopolitical volatility.